What’s the most financially efficient transit agency?

In the last blog post I wrote about the different objectives of transit agencies and how that impacts their financial performance. However, after taking  all of that into account, it is still valuable to see which transit agencies the most financially efficient and what we can learn from them.

There are many ways to analyze financial efficiency – for example, you could look at the cost of providing the service or the amount of subsidy that is required to run the system. One metric that takes all of these things into account is the farebox recovery ratio, which is simply the amount of farebox revenue generated divided by the operating costs.

In reviewing data from the National Transit Database (NTD)[1] for 2014, we can see that for large transit agencies (over $250 million in annual operating costs)[2], farebox recovery ratios range from 12% for the Santa Clara Valley Transportation Authority (VTA) to 78% for the Bay Area Rapid Transit District (BART). The weighted average for all 28 agencies is 41%.

Transit Agencies by Farebox Recovery2

In the table above, all of the top five agencies by farebox recovery ratio only operate rail services and do not run bus networks. At the same time, three of them are part of the New York MTA, showing just how much weight New York has on overall public transit statistics in the country. In fact, if the four New York MTA agencies are not included, the weighted average nationwide falls to just 35%.

There is also a strong geographic divide. The Northeast is home to 8 of the 11 agencies with the highest farebox recoveries and only 1 of the 11 agencies with the lowest farebox recoveries. Meanwhile, the South and West are just the opposite with 8 of the 11 agencies with the lowest farebox recoveries and only 1 of the top 11 (albeit that one is BART with far and away the highest ratio). The Midwest generally has fewer large agencies and they are a mixed bag between high-performing Chicago agencies and lower performing agencies in Cleveland and Minneapolis.

Regional Breakdown 2

In the next post I will talk more about what the keys are for an agency to have a high farebox recovery and what tradeoffs that might take for the services that are provided.

[1] The National Transit Database collects a variety of data from every transit agency in the country to provide a consistent dataset for comparisons. The data is submitted by each transit agency and is subject to some variation in interpretation but it provides the best data available for analysis between different agencies.

[2] For purposes of this analysis, operating costs shown here include both the cost of running the trains or buses, the costs of maintenance for both the vehicles and any guideway used, and general and administrative costs for the agency. It does not include capital costs for major repairs, upgrades, or expansions.

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3 thoughts on “What’s the most financially efficient transit agency?

  1. Boris, Very cool article on efficiency, and excited to see BART’s leadership in farebox recovery. I’ve been looking at rail efficiency from the energy perspective most recently, the NTD also useful to show similar efficiency ratios for electrified rail systems. With all of the state’s focus on transportation electrification, seems that this matter may also be worth a deeper dive from the efficiency perspective.

    Anyhow– keep blogging, and thanks for your leadership on HSR in Sacramento.

    Like

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